Logo of Malaysian-German Chamber of Commerce and Industry

Setting Up A Company In Malaysia

Whether you are exploring new markets or seeking to optimise your operations, Malaysia presents an exciting opportunity to grow your business and strengthen your global footprint. Are you ready to take the next step? Let’s make your Malaysian business venture a success!

Setting Up a Company in Malaysia.jpg

Malaysia offers a dynamic and business-friendly environment that is the perfect gateway for German companies looking to expand their reach in one of the world’s fastest-growing regions. With its strategic location, robust infrastructure, and diverse, skilled workforce, Malaysia provides the ideal platform for your business to thrive.

 

Are you a German company or investor looking to expand into Malaysia? The most common business entities for foreign investors are private limited companies known as Sendirian Berhad and Representative/Regional Office. 

Essential Information

Identify your nature of business

A private limited company allows a business to perform sales, services and trading activities.

Benefit from tax incentives

Various tax incentives are available for newly formed companies in major industry sectors.

Business complexity

The ease or complexity of associated compliance requirements and cost of incorporation varies as each business has its prescribed requirements.

Know the eligibility requirements

Forming a private limited company requires a qualified company secretary and locally residing director.

Set a timeline for operations

The status of a private limited company is permanent and an initial period of two years is granted for a Representative or Regional Office with the option for extension.
Sendirian Berhad (Sdn Bhd)

When setting up a company in Malaysia, all procedures and processes must comply with the latest Malaysian Companies Act.

 

For new private limited companies, the requirements are:

  • A minimum paid-up capital of RM1 only. Subject to company activities, an increase of paid-up capital is necessary.
  • A minimum of one subscriber to the share(s) of the company.
  • A minimum of one director who is at least 18 years of age and is residing in Malaysia. They must not be bankrupt and have not been convicted and imprisoned in the past five years. A local resident nominee director can be provided if required.
  • A minimum of one Company Secretary, who must be a member of any one of the prescribed professional bodies or licensed by the Companies Commission of Malaysia.
  • Must have a registered office in Malaysia to which all communications and notices may be addressed. It is standard practice in Malaysia to have the secretarial office as the registered office.
Representative or Regional Office or RE/RO

A Representative Office (RE) or Regional Office (RO) is an office established in Malaysia to perform permissible activities for its headquarters or principal office. The Representative Office or Regional Office is not allowed to undertake any commercial or trading activities and only represents its headquarters or principal office to undertake designated functions. Operations must be fully funded from sources outside Malaysia.

 

The proposed operational expenditure of a Representative Office or Regional Office must be at least RM600,000.00 per annum.

 

Duration of Establishment: 5 years (2+2+1 years)

Activities AllowedActivities Not Allowed
The approved Representative Office or Regional Office is established to perform the following permissible activities for its head or principal office:An approved Representative Office or Regional Office is not allowed to carry out the following activities:
Gathering and analysis of important information or undertaking feasibility studies on investment and business opportunities in Malaysia and the regionEngaged in any trading (including import and export), business or any form of commercial activity
Planning or coordination of business activitiesLease warehousing facilities; any shipment, transhipment or storage of goods shall be managed by a local agent or distributor
Identifying sources of raw materials, components or other industrial products;Sign business contracts on behalf of the foreign corporation or provide services for a fee

Participate in the daily management of any of its subsidiaries, affiliates or branches in Malaysia
Conduct research and product development 
Act as a coordination centre for the corporation's affiliates, subsidiaries and agents in the region 
Other activities which will not result directly in actual commercial transactions 

Let us take the guesswork out of the process and assist you with applying for the necessary permits and licences.

 

Business license

Having a valid business licence is essential for starting a business in Malaysia. It includes licences, registrations, permits and approvals. Business licences can be applied from the respective state authorities. The requirements for the application may vary according to each local authority.

 

Licences related to the manufacturing sector

Manufacturing companies with shareholders' funds of RM2.5 million or more, or those employing 75 or more full-time paid staff, are required to apply for a manufacturing licence approval from the Ministry of Investment, Trade and Industry (MITI).

 

Licences and permission related to the distributive trade, WRT

Foreign entities with a foreign equity stake of 51% or more in the Malaysian Distribution Trade Sector, which encompasses wholesalers, retailers, franchisors, direct sellers, suppliers distributing goods to the domestic market, as well as commission agents or other representatives, including international trading companies engaged in trading and services, must obtain approval from the Ministry of Domestic Trade and Consumer Affairs to operate.

For more information, please contact: